If this is the year you’ve decided to go house hunting, one of your first priorities should be to check your credit score. It’s critical in getting a mortgage loan and the best interest rate.
If your credit score, also known as a FICO score, is less than stellar, here are some ways to raise it. A FICO score ranges from 300 to 850. The higher your score, the more likely you’ll pay off your loan, as lenders see it. For loan purposes, you want to have a minimum score of 670, which is considered good. A score below 600 is considered to be a poor credit risk, according to The Mortgage Reports. The National Association of Realtors considers a good score to range from 700 to 759 and a fair score from 650 to 699 when applying for a mortgage loan.
You’re entitled to a free credit report each year. If you find errors, have them corrected immediately. That’s one way to raise your score. If you need errors corrected quickly, ask your lender about a rapid rescore service, which you can obtain only through your lender.
Paying off existing debt is the best way to raise your score. Replacing credit card debt with a personal loan can also raise it because you’re trading revolving debt with installment debt. Make your payments on time, and don’t apply for more than three new credit accounts in a month, adds The Mortgage Reports. Keep your credit card usage to less than 30 percent of your available credit.
Do not buy a car or any other big ticket item if you want to buy a house, advises The Nest. Taking on more debt will only lower your score.
Inland Real Estate Group : 201 E Veterans Parkway, Yorkville, IL 60560 : 630.553.3600